The following information is provided for XYZ Company, for the year ended Dec 31, 2021 I XYZ Company Balance Sheet Jan 1 2021 Dec 31 2021 XYZ Company Income Statement For the year ended Dec 31, 2021 6 $145,000 360,000 590,000 865,000 420,000 325,000 $2,705,000 Assets Cash Accounts receivable Inventory Plant & equipment (net) Investment in ABC Co. Land (undeveloped) Total Assets Labilities Accounts payable Long term debt Shareholders equity Total Liabilities & Shareholders' Equity $170,000 450,000 545,000 840,000 450,000 325,000 $2,780,000 0 1 Sales revenue Cost of goods sold Gross margin Selling & admin expense Operating income Less: interest expense tax expense @ 40% Net Income SA 100,000 2,542.00 1,550,000 1,125,000 433,000 120.000 125,200 $187,800 $380,000 1,000,000 1,325,000 $340,000 1,000,000 1,440,000 $2,705,000 $2,780,000 Other information: The company requires a minimum required rate of return = 18% Other information: The company requires a minimum required rate of return = 18% 20 Required: Complete the following analysis of XYZ Co. 1 Calculate the following amounts for 2021 > Average operating assets (2 marks) 2.0 . 6.0 > ROI and the Residual income for the year ended Dec 31, 2021 (6 marks) 3.0 3 The business is evaluating a new investment project which will require an increase in average operating assets = $220,000 and is forecasted to generate $44,000 in operating income. Calculate the ROI for this project If the company pays bonus based on ROI, would XYZ managers proceed with the project? (3 marks) 3 The business is evaluating a new investment project which will require an increase in average operating assets = $220,000 and is forecasted to generate $14,000 in operating income. Calculate the ROI for this project If the company pays bonus based on ROI, would XYZ managers proceed with the project? (3 marks) 30 1 42 43 84 6 Based on the ROI calculation, the company would proceed with the project fenter X in highlighted cells to make your choice) not proceed with the project 4 Now calculate the Residual Income on the project, assuming the minimum required rate of return = 20%. Based on this calculation would the company proceed with the project? (4 marks) 40 should Based on the Residual Income calculation, the company (enter X in highlighted cells to make your choice) proceed with the project not proceed with the project